Orosur Mining Inc.: Arenal Pillar Recovery Feasibility Study – Additional 40 Koz Reserve

Orosur Mining Inc. (“OMI” or the “Company”) (TSX: OMI) (AIM: OMI), a South American-focused gold producer and explorer is pleased to announce the results of a feasibility study to evaluate the opportunity to employ pillar-less mining using Cemented Rock Fill (“CRF”) to recover ore previously not included in the Transverse Stopes (“TS”) of the Arenal Deeps Mine. The study was completed by AMEC E&C Services Inc. (“AMEC”).

Highlights

• Additional 40 Koz gold Reserve
• Adds 38 Koz gold to current Arenal mine plan
• 8 months extension of the Arenal mine life
• Conversion of 427,000 tonnes from Measured and Indicated Resources to Probable Mineral Reserves at grade of 2.95 g/t Au
• Capex of approximately US$486,000
• Feasibility Study states net present value (“NPV”) (5% discount rate):
  • US$7.2 million at US$1,200/oz gold
  • US$10.0 million at US$1,300/oz gold

Ignacio Salazar, CEO of the Company commented:

“Further to our previously stated commitment to enhance near mine exploration, reserve replacement and mine life extension, I am delighted to announce the addition of 38 Koz of gold to the current Arenal mine plan, through the recovery of pillars using cemented rock fill. This project is expected to extend the Arenal Deeps mine life by 8 months through a relatively small investment. Orosur remains committed to achieving continued and sustainable operational improvements as well as methodically extending the mine life of our producing assets. Combined with investment discipline, we are dedicated to creating additional value within the Company.”

Background

Orosur commenced mining at its Arenal Deeps mine through a combination of Inclined-Room-and-Pillar and TS stoping in 2011. The mine has to date been using uncemented rock fill from the waste dumps of the Arenal Deeps pit to backfill the excavated TS stopes with 8 m wide pillars left in situ between adjacent TS stopes.

In September 2013, Orosur engaged AMEC to evaluate the feasibility of eliminating the pillars between the TS stopes through the introduction of CRF as the backfill in the TS stopes. AMEC´s work included the design of appropriate CRF parameters, CRF mixing and transportation systems, redesign of stoping sequences and development of cash flow models.

Original Design – Transverse Stoping

The current TS method at Arenal Deeps consists of primary and secondary stopes. Primary stopes typically measure 50 m long by 20 m high by 20 m wide. Secondary stopes have the same maximum dimensions, but include a 6 m internal pillar. There is a 8 m wide pillar between the primary and secondary stopes. The pillars allow backfill material to consist solely of waste rock without requiring any cement.

Proposed CRF Stope Design

A new sequence was developed for the TS between the -120 level and -200 level with no pillars left in situ. This sequence was integrated with the sequence of stoping for the TS below the -200 level, which will be mined per the current mine plan developed in the 2010 AMEC feasibility study using un-cemented rock fill and leaving 8 m wide rib pillars between stopes. Mining above these stopes will require compaction of uncemented rock fill to provide a stable floor for the use of scoops in the upper level stopes.

The proposed modified sequence of mining, draws upon the access drifts already developed for mining of the TS area per the existing mine plan. The new stopes will be approximately 18 to 20 m wide.

In order to optimize the operating costs of CRF in the proposed sequence, specific uncemented rock fill and empty stopes will remain unchanged from the original mine plan.

The base case gold price assumption was a constant gold price of US$1,200/oz. No additional revenue from other metals (including silver) was included in the project economic analysis.

The use of CRF in the TS area will result in an increase in the Probable Mineral Reserves, which were previously classified as Measured and Indicated Mineral Resources, as shown in the table below:

Table 1-1: Probable Mineral Reserves in the TS Area

The recovery of the pillars in the TS area of the Arenal Deeps mine has a net present value (NPV) of US$ 7.2 million, applying a 5% discount rate. An increase in the gold price from the base case of US$ 1,200/oz to US$ 1,300/oz will generate an NPV of US$ 10 million for this project. The mining of the additional Mineral Reserves at 1,400 tpd is expected to increase the mine life of Arenal by approximately eight (8) months.

The introduction of CRF requires around US$ 486,000 as additional capital costs. These costs cover a new underground mixing station which comprises a single shaft-type slump mixer, dust collector, and concrete flooring.

An increase in operating costs of the CRF system compared to the original rock-fill system is estimated to be US$4/t of ore. These extra operating costs include the costs of preparation and processing of CRF at the underground mixing station.

END

Qualified Person's Statement

The information presented in this press release has been reviewed by Walter Muehlebach, GM Exploration of OMI and by Francisco Castillo, Development & Technical Services Manager of OMI and they are both considered to be Qualified Persons under NI 43-101 reporting guidelines. Mr. Muehlebach is a graduate in Geology of the Universidad Católica del Norte (Chile) and a member of the Chilean Comisión Calificadora de Competencias en Recursos y Reservas Mineras, and has 23 years of experience in the field of mineral exploration. Mr. Castillo is a graduate in Mining Engineering of the Universidad de Santiago de Chile and a member of the Chilean Comisión Calificadora de Competencias en Recursos y Reservas Mineras, and has 12 years of professional experience.

Forward Looking Statements

All statements, other than statements of historical fact, contained in this news release constitute "forward-looking statements" within the meaning of certain securities laws, including the "safe harbour" provisions of the Securities Act (Ontario) and the United States Private Securities Litigation Reform Act of 1995 and are based on expectations estimates and projections as of the date of this news release. Such forward-looking statements include statements relating to the increase in mineral reserves, expected additional capital costs and operational costs, net present value and the extension of mine life. Such statements are subject to significant risks and uncertainties, and actual results and future events could differ materially from those anticipated in such statements. Such risks and uncertainties that may affect actual results include, but are not limited to; permitting time lines; the failure of plant; equipment or processes to operate as anticipated; accidents; labour disputes, requirements for additional capital and the price of gold. Other risks and uncertainties are included in the Company’s most recently filed Annual Information Form under the heading “Risk Factors”. The Company has made certain assumptions about the price of gold. The Company does not intend to update any forward looking statements except to the extent required by applicable law.

About Orosur Mining Inc.

Orosur Mining Inc. is a fully integrated gold producer and exploration company focused on profitable production as well as identifying and developing additional gold projects in South America. The Company operates San Gregorio, the only producing gold mine in Uruguay, and has assembled an exploration portfolio of high quality assets in Uruguay and Chile.

The Company is publicly listed in Canada (TSX: OMI) and London (AIM: OMI).

For more information please visit www.orosur.ca

Orosur Mining Inc
Ignacio Salazar, + 562 2924 6800
Chief Executive Officer
isalazar@orosur.ca
or
Cantor Fitzgerald Europe
Stewart Dickson / Tom Sheldon /Julian Erleigh (Corporate Finance)
Jeremy Stephenson (Corporate Broking)
Tel: +44 (0) 20 7894 7000